Instruction to speak English at work was not race discrimination

In Kelly v Covance Laboratories Ltd, the Employment Appeal Tribunal considered whether an employer’s instruction not to speak Russian at work was race discrimination.

Mrs Kelly, who was Russian, was employed by Covance Laboratories Ltd (Covance) which carries out animal testing.  Some of the company’s employees had been subjected to violent assaults by animal rights activists and the company had previously employed people who turned out to be animal rights activists working undercover.

Covance had concerns about Mrs Kelly’s behaviour from the start.  She frequently used her mobile phone during working hours and had long conversations in Russian on her phone in the toilets. As a result of her suspicious behaviour, she was instructed not to speak Russian at work, so that any conversations she had could be understood by her managers.   Similar instructions were given to Mrs Kelly’s Ukrainian colleagues.

At Mrs Kelly’s two month probationary review, she was informed that the company intended to start a formal capability procedure. Mrs Kelly raised a grievance complaining of race discrimination.  Her grievance was rejected and she was invited to attend a formal capability meeting.

Covance discovered that Mrs Kelly had been convicted of benefit fraud and given a suspended prison sentence.  She was invited to attend a disciplinary hearing to consider the allegation that she had failed to disclose a criminal conviction.  Mrs Kelly resigned the day before the hearing and lodged various claims against the company, including a race discrimination and harassment claim.  When her claims were rejected by the Employment Tribunal, she appealed to the EAT.

The EAT rejected the appeal.  Covance had provided a reasonable explanation for its actions that weren’t related to Mrs Kelly’s race or nationality.  The reason she was instructed to speak English was not because she was Russian, but because of reasonable suspicions Covance had about her behaviour.  In the context of Covance’s business activities and the security requirements relating to this, it was important that any conversations in the workplace could be understood by the English-speaking managers.

This case highlights an issue which is a potential problem for many employers.  Many organisations will employ some people who do not speak English as their first language who may wish to speak their first language to colleagues of the same nationality, or when on the telephone to friends and family.  If an employer has good business reasons to justify a language requirement at work, as it did in this case, it should ensure that the requirements of the policy are clear and are applied in a consistent way.  If an employer imposes language restrictions when they are not justified, or applies a language policy in an unfair way, the affected employees are likely to have grounds upon which to pursue a discrimination claim against their employer.

Football club entitled to summarily dismiss Marketing Director for disclosing confidential information

In Farnan v Sunderland Association Football Club the High Court considered whether it had been lawful for Sunderland Association Football Club (SAFC) to dismiss its Marketing Director, Michael Farnan, without notice, for disclosing confidential information.

The relationship between Mr Farnan and SAFC’s CEO, Ms Byrne, does not seem to have been a happy one and in May 2013, Ms Byrne trawled through Mr Farnan’s emails, due to concerns she had about emails he had been sending to his wife’s personal email account.  When Ms Byrne read the emails, she found numerous emails to Mrs Byrne about confidential SAFC matters.  She also discovered that Mr Farnan had emailed confidential documents to his wife in order to “bank” them, to protect his own interests in the event of a dispute with SAFC. In addition, it transpired that Mr Farnan had used confidential information and bid documents for his own purposes in seeking alternative employment whilst he was employed by SAFC and had wrongly disclosed a sponsorship agreement to a third party.  He was dismissed for gross misconduct.

Mr Farnan brought a breach of contract claim against SAFC in the High Court and claimed compensation of around £1 million.  He argued that he had sent emails to his wife so she could help him with “administrative support” and had been authorised by the Board to “bank” confidential documents.  Whilst the Court accepted that Mr Farnan had relied on his wife for administrative support, it did not accept that he had been authorised to bank confidential documents.  Mr Farnan had committed serious and repeated breaches of his contract of employment and there had been sufficient justification for SAFC to dismiss him without notice.

However, the Court was critical of other allegations which had been made against Mr Farnan, including the allegation that a Christmas card he had emailed to people from his SAFC account, featuring women with their breasts exposed wearing Santa Claus hats and the message “Breast wishes for Christmas”, amounted to gross misconduct.  Although some people would find the card offensive, it had to be considered in the context of the working environment in which it had been sent.  Similar incidents involving other employees had been tolerated, including an email which had been sent by one of the directors to Mr Farnan’s wife in which he had written “Happy birthday all the breast”.  Whilst Ms Byrne had spoken to the director about it, when he claimed it had been a typographical error, Ms Byrne accepted this and merely told him to be more careful in future.

Mr Byrne is also claiming unfair dismissal in the Employment Tribunal.  His unfair dismissal claim has not yet been heard.

Employer did not breach contract by awarding financial trader a smaller bonus than others

The High Court has considered a financial trader’s breach of contract claim which related to the way in which a bank exercised its discretion to award him an annual bonus in Paturel v DB Serviced Ltd [2015].

 

Mr Paturel was employed by Deutsche Bank (DB) on its money market derivatives desk and was entitled to a discretionary bonus.  Mr Paturel claimed that before he commenced employment, he had been led to believe that his annual bonus would be between in the region of 5-10% of the profits he generated.  However, in 2008 and 2009 Mr Paturel was awarded a discretionary bonus of 1% of the profits that had been generated in the relevant year.  Mr Paturel alleged that he was told that the low bonuses were attributable to other losses within the bank and that all members of the money market derivatives desk had been treated similarly.  However, he discovered that two of his colleagues, who were entitled to guaranteed bonuses, had received bonuses of 8% and 11% of the profits they had generated.

 

Mr Paturel issued breach of contract proceedings against DB and claimed compensation for the loss of bonus in 2008 and 2009.  He alleged that the way in which DB has exercised its discretion breached the implied duty of mutual trust and confidence, as amongst other things, DB had failed to give a proper explanation for the reduced bonus, had breached his reasonable expectation that he would receive a bonus of at least 5% and had given misleading statements as to how his colleagues had been treated.

 

The High Court held that Mr Paturel’s claims had no real prospect of success and dismissed his claim.  Mr Paturel had a “mere expectation” that the bonus would be a minimum of 5%, rather than a “reasonable expectation” and any breach of the duty of mutual trust and confidence which had occurred after the bonus had been awarded (in relation to the explanation given to Mr Paturel), was irrelevant.

 

Although in this case there was no breach of contract, this was largely due to the fact that whilst Mr Paturel’s bonus was discretionary, his colleagues’ bonuses were guaranteed.  The outcome may well have been different if all of the employees had only been entitled to a discretionary bonus.  Employers should be cautious about awarding substantially different bonuses to employees who are entitled to a discretionary bonus on the same basis and ensure that they can justify any differential treatment.

for more information contact Jayne Harrison or Emma Tegerdine.